What To Do With Your Tax Refund

It's tax season and you know what that means- FREE MONEY!!

Ok, not really.  But- as far as our house goes, we do consider this a little like free money.  Perhaps a bonus is a better way of looking at it.  For many years, we've had to pay the IRS.  So when it comes tax season, we always go into it with the expectation that we will have to pay.  Our motto- prepare for the worst.  So that's just what we do.

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Thankfully the last few years we'e actually recieved a refund.  Not a shit ton but really, anything would make us happy as long as we don't have to pay the government!

So that brings up the question- what should you do with your tax refund?

I've talked a bit about my goals and resolutions during the coming year.  Many of these things take money.  So this is a great time to work towards these goals when you have a little extra money.  Here's my recommendations on how to spend your tax refund in order of importance.  Please note- this is simply how my husband and I do things.  I'm not a financial expert and certainly no Dave Ramsey but I like to think I have the basics down.

1. Save It!  Holy Buckets people- of course you should be saving as much of your tax refund as possible.  My suggestion is to put 50% of it directly into savings.  Then leave it alone.  Here, I'll say it again.  Put half into savings and then LEAVE IT BE.
2. Pay Off Debt.  Now why didn't I put this item first?  Simple- without money in savings you are screwed.  If you need cash in an emergency and chose to put it all towards debt, then where would you be?  Turning to credit cards most likely...That means you'll get hit with high interest rates- no bueno.  My recommendation for the amount you'll put towards debt really depends on how much debt you have.  If you're swimming in it- then you should just put the remaining 50% towards it.  Otherwise, I would go with 25%.  Pay off the credit/debt with the highest interest rates first.
3. Personal Use.  Ah- and we've reached my personal favorite!  If you were allowed to pass #2, then you'll have 25% of your refund left.  Now's the time to take a look at some of those goals that you set back in January.  Any big purchases you've been holding off on?  Perhaps a family vacation you wanted to go on?  This category is yours to do with what you want- so go for it!

Splurging on a new light fixture!

Now, you're probably wondering why I include room for personal use.  Wouldn't it be more responsible to just put all your money towards savings and debt?  Well- der.  Of course it would be!  But think about it- what kind of life would that be?  How depressing to be stuck in this cycle year in and year out.  Don't underestimate the value of quality of life.  If 75% of your refund is going towards being responsible then I don't see anything wrong with using the remaining 25% for having a little fun.  Do you?

And just in case anyone is wondering- the husband and I are buying a new light fixture that has needed replacement for 3 years, a ceiling fan for the kiddo's bedroom and new tires for the car.  So yeah- sometimes personal use is still going the responsible route.  But man- will it be awesome to have a new light fixture for our office space!

Resolutions and Goals for the New Year

Well here it is- 2014.  Seems only right that we begin the New Year talking about resolutions, or as my son calls them- revolutions.

I for one, am not too big into declaring a New Year's resolution simply for the sake of doing so.  Seems pointless to me.  However, I do believe in setting goals.  Personal goals, goals for your family, goals for your home, etc.  Goals are great!  And since I love organizing and planning- goals are something I think about often.  They don't simply pop up at the beginning of the new year as a resolution that I'll forget about several months later.

The New Year is a chance to re-evaluate your progress, make some changes and perhaps add in a few new goals.  My advice is to break it down into categories and try to set realistic goals.  Think about your time constraints, finances, your life, when outlining what you want to accomplish in the coming year.  Basically, set yourself up for success!


The categories that I use are pretty straightforward and easy for everyone to adopt.  Or come up with your own- whatever works best for you!

Personal

• This is strictly for your own self improvement.
• Things such as drink more water, give yourself quiet time to reflect, work on your patience & understanding, read more books, drink less caffeine etc.
• My personal goal this year is to go for a 20 minute walk at least 5 times per week.
• Last year's goal was to reduce stress.

Family

• Items can include- visiting with family more often, watching less TV, spending more time together, eating meals at the table each night etc
• My goal for my family this year is to take a few small, mini weekend trips together.
• Last year's goal was to focus on the father/son bond and have my boys spend more time together just the two of them.

Health/Wellness

• Is there a change you've been wanting to make in your diet or your family's diet?  How about spiritual health?
• Lots of great topics covered in this category- eating more veggies, meditating, going vegan, adding supplements, taking up yoga, attending church, eliminating GMO's and processed foods and on and on the list goes!
• My health and wellness goal for my family this year is to get rid of the toxic cleaners and soaps we use and to find a better alternative.
• Last year's goal was to eat out less, especially fast food.

House/Home

• Such a fun category full of projects and home improvements like adding a garden to your backyard, cleaning the carpets, buying a new couch, organizing the garage etc
• I usually have several tasks to accomplish in this category each year.  And this year is no exception!  This year I hope to build an outdoor firewood storage, add a 2nd pantry for my food storage, replace the nightstands in the master bedroom and re-tile the fireplace.
• Last year's goals were to build my son's swing set, put up shelves in the living room, frame more pictures and get a fridge/freezer for the garage.

Emergency

• The wild card category.  Most people don't think about this category when setting goals but don't overlook its importance!
• Items in this category include, starting an emergency cash savings, buying a fire extinguisher for your home, putting together a car BOB, starting a freezer stockpile, making sure you have a well stocked 1st aid kit, etc
• My goals for this year are to increase my food storage and complete a weekend without power challenge to see how we can better improve ourselves and our home in the case of a major storm.
• Last year's goals were to finish our BOB's, increase our savings, add carbon monoxide detectors inside the home and get a fridge/freezer for our garage so we could increase our freezer stockpile.

So there you have it- whew!  Now that's a lot of goals for the new year!  But when you break it down into categories, it doesn't seem so overwhelming.  To better increase your chances of success you can assign yourself a task to focus on each month.  For example, this month I am choosing to focus on buying a second pantry and getting the husband to assemble it so that I can continue to work throughout the year on increasing my food supplies.  Next month, we will be taking a small weekend trip to celebrate my son's 9th birthday.

I love setting goals and I love accomplishing my goals.  Good luck to you in the New Year!